Is China still an outlaw in the South China Sea?

A team of researchers fact-checked a recent report suggesting that China is failing to comply with a 2016 tribunal ruling. Contrary to what the report suggests, they argue that for the most part, China has been cooperating surprisingly well.

Chinese vessels are pictured in disputed South China Sea, April 21, 2017. REUTERS/Erik De Castro

The South China Sea has been the scene of considerable international tension in recent years. This is not surprising, given its enormous economic, strategic and symbolic value, and the fact that six countries vie for jurisdiction over it.

Roughly one-third of global shipping passes through the South China Sea annually — slightly more than 25 percent of all global trade by volume, and slightly less by value. Its rich fishery provides food and income for millions of people in the region. It is known to have significant oil and gas reserves. It is home and safe haven to China’s ballistic missile submarine fleet. And the fact that many rival claimants have historically rocky relations means that conflicting claims trigger nationalist passions.

Hostile relations between China and the United States make the South China Sea a potentially explosive geopolitical flashpoint as well. The dominant perception in Washington is that China is unlawfully and aggressively seeking to turn the South China Sea into a virtual Chinese lake. The dominant perception in Beijing is that the United States is attempting to contain China and deny it its legitimate rights.

There is no doubt that China’s claims in the South China Sea are unusually expansive. Only China and Taiwan claim sovereignty over all of the territorial features in the South China Sea. Vietnam, the Philippines, Malaysia and Brunei claim only subsets. And from 2012–2016 China did indeed assert its claims in an unusually aggressive manner. But in 2016, an arbitration tribunal in The Hague issued a ruling in Philippines v. China undercutting a maximalist interpretation of China’s claims, which was profoundly embarrassing to Beijing, both on substance and on optics. The ruling effectively labeled China an outlaw state. While China officially rejected the ruling on the ground that the tribunal lacked jurisdiction, it has nonetheless done its best quietly to comply and to present itself as a good neighbour and a champion of regional peace, stability and cooperation. But these recent efforts have largely gone unnoticed. As a result, the “Hostile China” narrative persists.

Earlier this summer, the Asian Maritime Transparency Initiative (AMTI) released a report finding that China is complying with only two of 11 “actionable findings” of the arbitration tribunal’s ruling, and that on a third its position is insufficiently clear to assess.

In general, the AMTI has done valuable work bringing relevant information about the South China Sea to light, but in this particular case its analysis falls short. In fact, China is only noncompliant with at most two findings, and possibly only one, and on these points it appears that its hands are tied.

Cognitive psychology tells us that narratives, once constructed, are enormously difficult to change, and that they powerfully affect the interpretation of raw or ambiguous data. To some extent, then, the errors evident in the AMTI report are perfectly natural, given the strength and ubiquity of the “Hostile China” narrative. But our team of researchers in Waterloo suspect that they are also grounded in part in a lack of familiarity with the dynamics of Chinese policymaking. Put another way: the AMTI has misunderstood what China is doing, and why.

To make the case, we will go through the AMTI’s assessment point by point and conclude with a discussion of why China embraced a policy of “assertive unilateralism” in 2012 and its current but largely unnoticed policy of “stealthy compliance” in 2016.

Tribunal Finding 1

China cannot claim historic or other rights within the “nine-dash line” beyond the territorial seas, exclusive economic zones (EEZs), and continental shelves permitted by the United Nations Convention on the Law of the Sea (UNCLOS).

From the AMTI’s report:

In one of the two most far-reaching decisions in the case, the arbitrators found that “the Convention [UNCLOS] defines the scope of maritime entitlements in the South China Sea, which may not extend beyond the limits imposed therein” (Judgement, para. 278). This means that “China’s claims to historic rights, or other sovereign rights or jurisdiction, with respect to…the ‘nine-dash line’ are contrary to the Convention and without lawful effect” if they extend beyond the territorial sea, exclusive economic zone (EEZ), and continental shelf to which it is entitled by UNCLOS (para. 279).

Nevertheless, the day after the arbitral award was issued, the Chinese Ministry of Foreign Affairs released a white paper which insisted, “In addition [to internal waters, territorial sea, contiguous zone, EEZ and continental shelf], China has historic rights in the South China Sea.” In the last three years, Chinese officials have spoken less often about the nine-dash line as the basis of their claim over the South China Sea, but China continues to claim ill-defined historic rights to virtually all waters and seabed in the South China Sea. It is on this basis that Chinese fishers operate in the EEZs of Vietnam, the Philippines, and Indonesia, and on which Beijing objects to all oil and gas operations within the nine-dash line, regardless of how far they lie from Chinese-claimed land features.

A common misconception is that China has articulated a strong and clear claim to complete maritime jurisdiction within the so-called nine-dash line. This is false. The nine-dash line originated with the Nationalist government of Chiang Kai-shek in 1947 and was uncritically adopted also by the Communist Party when it seized power on the mainland in 1949. Taiwan continued to use it, however. In 1998, Taiwan adopted a Law on the Territorial Sea and Contiguous Zone that was consistent with UNCLOS (even though Taiwan is not a recognized signatory), implying that the nine-dash line was a simple cartographic convenience intended to delineate the territorial features over which Taiwan claimed sovereignty. Beijing’s interpretation of the nine-dash line, however, remained ambiguous.

Equally ambiguous was China’s assertion of “historic rights” in the South China Sea. Beijing has never stated that it has a historical-rights based claim to complete maritime jurisdiction within the nine-dash line. The closest it has come has been to state that “general international law” provides legal cover for “historic rights and the regime of outlying archipelagos of a continental State,” but it has never articulated exactly what this means. Nor, for that matter, has China offered a remotely plausible argument suggesting that “general international law” has ever recognized one country’s right to exclusive maritime jurisdiction over an entire sea ringed by competing claimants. That said, even the arbitration tribunal acknowledged that China has certain historic rights in the South China Sea — for example, traditional fishing rights at Scarborough Shoal (Judgement, para. 812).

What are we to make of the Chinese Ministry of Foreign Affairs’ statement on July 13, 2016? Quite simply, it reasserted a longstanding ambiguous position. It was also clearly prepared in advance of the ruling and in anticipation of an unfavourable outcome. Its purpose was rhetorical, and its intended audience domestic, about which more anon.

More to the point, however: Chinese officials have not “spoken less often about the nine-dash line as the basis of their claim over the South China Sea” — a misleading assertion in and of itself, as the nine-dash line never was, nor could have been, a “basis” of a claim, merely a signifier of a claim. Instead, they have stopped talking about it altogether. The last time China made official reference to the nine-dash line was shortly after the tribunal’s ruling. It has simply disappeared from Chinese discourse.

Chinese fishers do continue to operate in littoral states’ EEZs, but this is not in and of itself inconsistent with the tribunal’s ruling. If these are traditional Chinese fishing grounds, these activities are permitted under UNCLOS Art. 51.

Finally, with respect to Chinese objections to other countries’ oil and gas development within the nine-dash line, it is notable that China does not, in fact, act to prevent drilling; it merely signals its objections. The purpose of these objections is to encourage joint development initiatives, which are not inconsistent with UNCLOS or with the tribunal ruling if voluntarily entered into.

In sum: there is no ground to believe that China is maintaining a legal claim inconsistent with the tribunal’s ruling. Consequently, there is no non-compliance.

Tribunal Finding 2

Scarborough Shoal and high-tide features in the Spratly Islands generate territorial seas but not EEZs or continental shelves.

From the AMTI’s report:

The second key finding in the case was that neither Scarborough Shoal nor any of the high-tide features in the Spratly Islands “are capable of sustaining human habitation or an economic life of their own” and “are therefore legally rocks for purposes of Article 121(3) and do not generate entitlements to an exclusive economic zone or continental shelf,” (paras. 643 and 646). This means that the only EEZs and continental shelves in the South China Sea are those generated by the coastlines of the surrounding states and, possibly, some of the Paracel Islands. The Spratlys and Scarborough Shoal generate only a series of 12-nautical-mile territorial seas…

It is widely believed that China claims EEZs and continental shelves from Scarborough Shoal and many, if not all, of the Spratlys, but this has not been made explicit in Chinese law or public statements. Beijing’s 2016 white paper insists that “China has, based on the Nanhai Zhudao [islands of the South China Sea], internal waters, territorial sea, contiguous zone, exclusive economic zone and continental shelf.” But it could be argued that this only means that some of the islands, particularly the Paracels, generate these entitlements. Additionally, Chinese actions in its neighbors’ EEZs can be explained by its ongoing demand for historic rights and are therefore not proof of a claim to EEZs and continental shelves from the Spratlys or Scarborough. Future developments, for instance the declaration of straight baselines around Chinese-claimed features in the Spratlys, could make Chinese non-compliance with this piece of the arbitral award more explicit, but for now Beijing’s claims remain too ambiguous for a clear assessment.

On this point, the AMTI report is correct. China does not explicitly claim EEZ or continental shelf rights inconsistent with the tribunal’s ruling.

Tribunal Finding 3

Second Thomas Shoal and the waters around it are part of the EEZ and continental shelf of the Philippines.

From the AMTI’s report:

The tribunal found that Second Thomas Shoal, which has been occupied since 1999 via the intentional grounding of the Philippine navy ship BRP Sierra Madre, is underwater at high-tide and generates no maritime entitlements of any kind. And because none of the Spratly Islands can generate EEZs or continental shelves, “There is, accordingly, no possible entitlement by China to any maritime zone in the area.” Second Thomas Shoal sits within 200 nautical miles of the Philippine coast and is therefore “part of the exclusive economic zone and continental shelf of the Philippines” (paras. 646 and 647). Nevertheless, China Coast Guard vessels continue to patrol near Second Thomas regularly and in May 2018 a People’s Liberation Army-Navy (PLAN) helicopter dangerously harassed a Philippine resupply mission to the Sierra Madre.

Nothing in UNCLOS prohibits coast guard ships from sailing in other countries’ EEZs, and given that Mischief Reef — home to a major Chinese installation on one of its artificial islands — is less than 17 nautical miles away, it is no surprise that Chinese ships “patrol near Second Thomas regularly.” Of course, China’s continued presence at Mischief Reef is problematic, as we discuss next.

It is unclear whether a PLAN helicopter “dangerously harassed a Philippine resupply mission to the Sierra Madre” in May 2018; the Philippine government refused to call it harassment. But it is clear that this was the first incident of any kind at Second Thomas Shoal since the tribunal ruling, and it stands in stark contrast to China’s many aggressive pre-ruling efforts to actively interdict resupply efforts (Judgment, paras. 1115–1127). This is clear evidence of a desire not to stray offside the ruling.

Tribunal Finding 4

China illegally occupied Mischief Reef, which is part of the Philippine continental shelf.

From the AMTI’s report:

Like Second Thomas Shoal, the arbitral tribunal ruled that Mischief Reef is a low-tide feature that constitutes part of the EEZ and continental shelf of the Philippines. Further, the arbitrators found that “China has, through its construction of installations and artificial islands at Mischief Reef without the authorisation of the Philippines, breached Articles 60 and 80 of the Convention…The Tribunal further finds that, as a low-tide elevation, Mischief Reef is not capable of appropriation” (para. 1043). This is probably the most difficult part of the ruling to imagine China ever complying with because it would require abandoning its naval and air base at Mischief or securing Philippine permission to continue its occupation. In the meantime, China not only occupies the reef but seemingly continues to claim maritime entitlement to it as evidenced by its objections to U.S. freedom of navigation operations within 12 nautical miles of the facility.

Only the Philippines has the right to build at Mischief Reef. Technically, this means that China has built an artificial island for the Philippines. Don’t expect a handover ceremony any time soon.

The AMTI report is correct to note this is the most difficult part of the ruling for China to comply with. One can imagine various ways in which Beijing might escape from this embarrassing conundrum, such as negotiating a lease arrangement, but anything of that sort would represent a humiliating confession of error and a loss-of-face climbdown that would jeopardize the Communist Party of China’s domestic legitimacy. For Beijing, this is a political impossibility.

To this point, the Philippines has not attempted to force the issue, which must surely count as an extraordinarily generous display of forbearance. But China, too, having been caught in egregious illegality, has done its best to keep its head down. Since the tribunal ruling, for example, China has tried to change its messaging on freedom of navigation operations, complaining of them primarily as threats to security and stability rather than as threats to Chinese rights or sovereignty. There are exceptions, of course, which may either be evidence of a hardening line in Beijing or of linguistically incompetent local air defence operators; but the fact remains that China’s artificial island building program at Mischief Reef is the single greatest obstacle to an orderly settlement of disputes in the South China Sea.

Tribunal Finding 5

China illegally prevented the Philippines from exploiting the resources of its continental shelf.

From the AMTI’s report:

The arbitral award concluded that Reed Bank, which is entirely underwater and sits within 200 nautical miles of the Philippines, is part of that country’s continental shelf. Referring to a specific incident in which Chinese law enforcement vessels prevented the operations of a Philippine survey ship, the tribunal found that “China has…breached Article 77 of the Convention with respect to the Philippines’ sovereign rights over the non-living resources of its continental shelf in the area of Reed Bank” (para. 716). China continues to block the Philippines from exploring for oil and gas at Reed Bank despite the ruling. In November 2018, the two sides signed a memorandum of understanding that could pave the way for oil and gas development at Reed Bank. The details have not been hashed out yet and it is possible that the agreement could pave the way for China to come into technical compliance with the ruling. If Beijing agrees to have a Chinese company invest in a Philippine service contract (SC 72) at Reed Bank under Manila’s supervision, the agreement will be consistent with the ruling. But if China insists on a joint development agreement outside of Philippine jurisdiction, it will cement its noncompliance.

China does not continue to “block the Philippines from exploring for oil and gas in the area of Reed Bank.” The Philippines instituted an exploration ban in 2014, i.e., well before the tribunal ruling.

Yes, “If Beijing agrees to have a Chinese company invest in a Philippine service contract (SC 72) at Reed Bank under Manila’s supervision, the agreement will be consistent with the ruling,” but no, “If China insists on a joint development agreement outside of Philippine jurisdiction,” it will not “cement its noncompliance” if Manila agrees. Either way, there is no demonstrable noncompliance here as of yet.

Tribunal Finding 6

China violated the Philippines’ rights to fish within its EEZ.

From the AMTI’s report:

The tribunal found that China violated the Philippines’ sovereign rights to the living resources of its EEZ, in particular “by promulgating its 2012 moratorium on fishing in the South China Sea, without exception for areas of the South China Sea falling within the exclusive economic zone of the Philippines and without limiting the moratorium to Chinese flagged vessels” (para 716). China nonetheless continues to declare a unilateral fishing ban from May to August each year covering all waters north of the 12th degree of latitude, including large sections of the EEZs of the Philippines and Vietnam. The most recent ban provoked an angry response from the office of the president of the Philippines.

China’s annual moratorium on fishing, as the AMTI report indicates, covers waters north of 12° N — i.e., well north of the Spratly Islands. Of all the territorial features on which the Philippines asked the tribunal to rule, only Scarborough Shoal falls within this zone. The tribunal found (para. 1203.B.11) that Philippine fishers have traditional fishing rights in this region, and China has granted them access, albeit on somewhat unequal terms (see below). But in any case, China has only enforced the moratorium on its own fishing boats, which is fully within its sovereign rights to do anywhere in the world regardless of jurisdiction.

More interestingly, shortly after the tribunal ruling, even in the Spratlys China backed off attempting to enforce fishing regulations more than 12 nautical miles from features that it claims, as shown in Figure 1.

Tribunal Finding 7

China failed to prevent its fishers from operating illegally in the Philippine EEZ.

From the AMTI’s report:

The arbitrators determined that China had “failed to exhibit due regard for the Philippines sovereign rights with respect to fisheries in its EEZ,” citing cases in which Chinese law enforcement vessels tolerated and failed to prevent Chinese-flagged vessels from operating at Mischief and Second Thomas Shoals in 2013 (para. 757). Hundreds of Chinese fishing vessels continue to operate under the supervision of the China Coast Guard at Mischief Reef and throughout the Spratlys on a daily basis, though most spend more time serving in the maritime militia than they do fishing. In June, a Chinese fishing vessel operating in the Philippine EEZ at Reed Bank sank a Filipino fishing boat, leading to an ongoing crisis in Sino-Philippine relations. Elsewhere in the South China Sea, fishing vessels from China continue to operate with the support of the coast guard and navy as far away as Indonesia’s EEZ.

The circumstances of the June incident are unclear and under investigation. There is no indication at present that it is evidence of deliberate non-compliance with the tribunal ruling.

Chinese fishing boats indeed continue to operate elsewhere in the South China Sea, but the AMTI report gives no evidence that they do so “with the support of the coast guard and navy” more than 12 nautical miles from features that China claims — and, in any case, as we indicated above, their activities may be covered by UNCLOS’ Art. 51 allowance for traditional fishing grounds even if they are farther afield. There are no post-ruling judgments on this question.

Tribunal Finding 8

At Scarborough Shoal, which has a handful of rocks that break water at high-tide, the tribunal concluded that both Chinese and Filipino fishers have the right to engage in traditional fishing regardless of who ultimately has sovereignty over the shoal. But the arbitrators ruled that China had, “through the operation of its official vessels at Scarborough Shoal from May 2012 onwards, unlawfully prevented Filipino fishermen from engaging in traditional fishing” (para. 814). By late 2016, in an apparently gesture of goodwill to the Duterte government, China Coast Guard vessels stationed at Scarborough began to allow Filipino fishing vessels to operate along the exterior of the reef, though they were not permitted to fish inside the lagoon. That remains the case today, though the situation remains tense amid frequent reports of harassment and intimidation of Filipino fishers by the Chinese law enforcement personnel at the feature.

Nonetheless, this is the one aspect of the arbitral award with which China is most clearly in compliance. And that fact is so politically important to the Duterte government that the president recently claimed to have made a secret verbal agreement with President Xi Jinping in 2016 to turn a blind eye to Chinese fishing in the Philippine EEZ in exchange for Filipino fishing rights at Scarborough—in effect trading non-compliance with one part of the judgement for compliance with another.

The AMTI report is correct to note that Beijing has restored access to Scarborough Shoal for Philippine fishers, though not on equal terms. This appears to be a case of compliance with the letter, but not the spirit, of the tribunal’s ruling.

If, in fact, the Philippine government has quietly agreed in return to let China fish elsewhere in its EEZ, this would undercut the AMTI report’s judgment on the previous point that China failed to prevent its fishers from operating illegally in the Philippine EEZ. Any country can grant access to another country’s fishing boats within their EEZ.

Tribunal Finding 9

The award concluded that China had, “through its toleration and protection of, and failure to prevent Chinese fishing vessels engaging in harmful harvesting activities of endangered species at Scarborough Shoal, Second Thomas Shoal and other features in the Spratly Islands, breached Articles 192 and 194(5) of the Convention” (para. 992). This was largely, though not exclusively, in reference to the large-scale extraction of endangered giant clams which destroyed or severely damaged more than 25,000 acres of shallow coral reef from 2012 to 2016, often under the eye of Chinese law enforcement vessels. After a sharp drop-off in activity after 2016, Chinese clam harvesters have returned to their destructive activities at Scarborough Shoal and throughout the Paracels, often acting within clear view of the China Coast Guard.

The evidence suggests that Chinese fishers have indeed recently been harvesting giant clams at Scarborough Shoal in blatant disregard for international protections of endangered species and sensitive coral reef ecosystems. This predatory behaviour does not, however, appear to reflect policy, as authorities on Hainan Island have made efforts to curtail it, which they certainly would not have done without Beijing’s blessing.

Harvesting of giant clams in the Paracels is both tragic and appalling, but not inconsistent with the tribunal’s ruling, which applied only to the features referenced in the Philippines’ original submission: i.e., the Spratly Islands and Scarborough Shoal.

Tribunal Finding 10

China illegally destroyed the marine environment through its island-building campaign.

From the AMTI’s report:

The tribunal found that from late 2013, China’s “island-building activities at Cuarteron Reef, Fiery Cross Reef, Gaven Reef (North), Johnson Reef, Hughes Reef, Subi Reef and Mischief Reef, breached Articles 192, 194(1), 194(5), 197, 123, and 206 of the Convention,” which mandate obligations to protect and preserve the marine environment. (para. 993) China completed its dredging and landfillwork in the Spratly Islands by late 2016, and its last documented island-building anywhere in the South China Sea was in the Paracels in mid-2017. It could be argued that some of China’s ongoing activities, for instance the installation of monitoring stations on reefs in the Paracels, are still illegally damaging marine habitat without proper environmental impact assessments. But having run out of space for new landfill, China is now technically in compliance with the bulk of this section of the ruling. That could change, however, should China launch new dredging or landfill work at Scarborough Shoal or elsewhere.

China certainly violated its legal obligations to respect sensitive marine environments during its artificial island building campaign. But as the AMTI report notes, this campaign has ended. China is therefore no longer offside. Its activities in the Paracels, whether environmentally damaging or not, are irrelevant to the question of its compliance with the tribunal ruling, and the AMTI’s speculative ruminations about future non-compliance with respect to “Scarborough Shoal or elsewhere” are worrisome indications of a predisposition to find fault.

Tribunal Finding 11

Chinese law enforcement vessels violated COLREGs by creating a risk of collision and danger to Philippine vessels.

From the AMTI’s report:

Finally, the arbitrators ruled that during the 2012 standoff following their seizure of Scarborough Shoal, Chinese law enforcement vessels “created serious risk of collision and danger to Philippine vessels and personnel” which meant China had “violated Rules 2, 6, 7, 8, 15, and 16 of the COLREGS [International Regulations for Preventing Collisions at Sea] and…Article 94 of the Convention.” While there has been no repeat of these incidents at Scarborough Shoal due to Philippine authorities keeping their distance, China Coast Guard, PLAN, and maritime militia vessels continue to regularly engage in the same violations of COLREGs to create the risk of collision for foreign vessels in the South China Sea. The harassment of a Philippine resupply vessel near Second Thomas Shoal in May 2018 was one example. The dangerous actions of a PLAN ship during the USS Decatur’s freedom of navigation operation through the Paracels in October 2018 was another. And then there are the frequent violations of COLREGs by Chinese fishing vessels and state-directed militia toward both fellow claimants and outside actors.

The “harassment” of a Philippine resupply vessel near Second Thomas Shoal was allegedly by a helicopter, not a ship, and is therefore not covered by COLREGs. The near collision of the USS Decatur and a PLAN vessel occurred not in the Paracel Islands, but near Gaven North Reef in the Spratly Islands. The tribunal found that Gaven North Reef is a “naturally formed [area] of land, surrounded by water, which [is] above water at high tide, within the meaning of Article 121(1) of [UNCLOS]” (Judgment, para. 1203.B.3b), and therefore entitled to a 12-nautical miles territorial sea. China claims sovereignty over Gaven North Reef. The tribunal did not and could not pass judgment on that claim. COLREGs applies to the high seas, not territorial waters, and as a result they do not cover this particular interception.

Understanding Chinese policy

Whereas the AMTI judged China to be in compliance with only two of 11 actionable findings (and was unable to assess its compliance with a third), our analysis indicates that China is currently complying with at least nine, and possibly 10. Its continued occupation of Mischief Reef is clearly offside. It is also failing in its obligation to prevent destructive clam harvesting at Scarborough Shoal, though this may not be as a matter of policy.

To be sure, China has officially rejected the arbitration ruling on the ground that the tribunal lacked jurisdiction. It has also pressed its neighbours to jointly develop resources to which China is clearly not entitled. But it has made great efforts to avoid demonstrating flagrant non-compliance, dramatically curtailing certain activities with which it was comfortable before the ruling came down.

What explains China’s new high-wire act? To answer this question, it is necessary to understand the background of China’s current bind. China’s expansive claims in the South China Sea began to crystalize following Japan’s defeat in World War II, but they were not politically salient until the United States withdrew from Vietnam and surveys began to indicate that the South China Sea had enormous untapped resource potential. Until then, despite China’s repeated claim that it enjoyed “indisputable sovereignty” in the South China Sea from “time immemorial,” virtually no one in China gave it a moment’s thought. The fact that other countries disputed Chinese claims demonstrated beyond question that they were, in fact, disputable, so the relevant question was whether they were justified.

Beijing made life difficult for itself by signing and ratifying UNCLOS, which superseded all prior maritime law on the topics it addressed. This effectively pulled the rug out from underneath any possible historically-based claim of the kind rival claimants believed China to be asserting by reference to the nine-dash line. UNCLOS, of course, addressed only maritime entitlements, not territorial ones, so it left untouched Chinese claims to sovereignty over the Spratlys, Paracels and Scarborough Shoal, contested though they were. As time passed, whatever maritime rights attached to these features rose in value as a rapidly-growing China increasingly depended upon the South China Sea’s fisheries, offshore oil and gas resources, trade routes, and, more recently, (limited) strategic depth for protecting China’s submarine-based nuclear deterrent. China believed unquestioningly that most of these features were “islands” according to UNCLOS, and therefore entitled not only to a 12-nautical miles territorial sea, but a further 12-nautical miles contiguous zone in which China could exercise some policing and security-related powers, and — most importantly — a 200-nautical miles EEZ. The tribunal’s finding that neither Scarborough Shoal nor any of the Spratlys was an “island” entitled to an EEZ was by far the most shocking part of the ruling for Beijing because it undercut any possibility that UNCLOS itself could backstop an expansive Chinese claim to maritime jurisdiction given the increasingly obvious futility of maintaining a “general international law”-based claim.

Domestic politics and bureaucratic politics further complicated things for Beijing. Until the early 2000s, domestic politics did not represent a significant constraint: foreign and security policy were the exclusive province of the government. But everything changed, beginning in 2003, with a series of eruptions of popular outrage against Japan. The most significant took place in 2005 in response to Japanese Prime Minister Junichiro Koizumi’s decision to visit Yasukuni Shrine and his government’s efforts to promote a more “patriotic” historical narrative, seen as shockingly revisionist in both China and Korea, minimizing or glossing over the “comfort women” issue, the Nanjing Massacre, and various other wartime atrocities. For the first time in its modern history, China witnessed mass violent protests on an international issue — in some cases with official blessing and encouragement.

The initial view in Beijing was that liberating popular opinion in support of foreign policy objectives was a good thing. It strengthened the government’s hand in international disputes, boosted the regime’s domestic standing through the “rally ’round the flag” effect, and provided a safety valve for popular dissatisfaction with other issues that might otherwise be directed at the authorities themselves. As part of its own patriotic education campaign, the regime played up the themes of inviolable sovereignty, territorial integrity, and the dangers of foreign predations. Within one generation, the Chinese people went from neither knowing nor caring about the South China Sea to believing that it had been an integral part of China from time immemorial. Having staked its prestige and much of its domestic legitimacy as the defender of China’s integrity and sovereign rights, the regime could not possibly simply publicly accept the outcome of the Philippines arbitration. It had to be seen domestically not to be backing down.

The relevant bureaucratic politics story is complicated, but can be reduced to two essential turning points: 2012 and 2016. In 2012, the internationalist-minded Ministry of Foreign Affairs suddenly found itself outflanked and sidelined by hard-line nationalists in the People’s Liberation Army and other security organs who successfully argued internally that China’s engagement-oriented approach to foreign affairs had failed to win for China the influence, respect and deference it was owed not only as a rising great power but as a great civilization that had suffered more than 100 years of humiliation at the hands of other countries. The subsequent period of assertive unilateralism saw the 2013 East China Sea Air Defence Identification Zone fiasco; the 2014 HYSY 981 conflict with Vietnam; the breakneck artificial island building campaign in the Spratlys; the replacement of whatever benign image China enjoyed abroad with a new narrative of an aggressive, expansionist China; and a great deal of balancing behaviour — all of which left China worse off than before. The humiliation of the arbitration tribunal ruling gave the internationalists in the foreign ministry the ammunition they needed to reassert their influence once again.

Today, Beijing is attempting to thread the needle. It continues to reject the tribunal ruling officially (to keep the domestic audience happy) but is quietly doing its best to comply (to avoid antagonizing the international audience). At the same time, it is attempting to change the channel. Instead of debating legal rights in the South China Sea, China is proclaiming its commitment to peace, security and international law, and it is preaching cooperation, joint development, and sustainable management of resources. Clearly, the regime wants the issue to go away.

Shortly after the tribunal ruling came down, analysts feared that China might signal its rejection in a more dramatic way — for example, by stepping up activities inconsistent with the ruling, or possibly even by withdrawing from UNCLOS. President Rodrigo Duterte did Beijing a great favour by not pressing the Philippines’ victory and by proffering an olive branch instead, thus enabling China to save face. But it did not solve the crucial problem of China’s artificial island at Mischief Reef. This is the one issue on which China cannot both quietly comply with the ruling and pretend for domestic purposes that it need not.

Why does this matter?

There are, of course, various ways in which the South China Sea issue could develop. The status quo is tenable as long as no one attempts to force an issue. Joint development agreements would be welcome contributions to peace and stability, and China’s competitor claimants may ultimately decide that such things are in their national interest for pragmatic reasons. But there is always the danger of an inadvertent clash inflaming nationalist passions once again and undermining the current studied ambiguity on which peace and stability depends. Worse still, hardliners may begin winning arguments in Beijing once again, and we may find ourselves right back where we were in 2012.

One way to encourage a negative outcome is to feed the now-dominant narrative of China as an aggressive, expansionistic outlaw state that is complying with at best three and perhaps only two of 11 “actionable findings” in the arbitration tribunal ruling — when in fact it is trying much, much harder, and doing much, much better.

For the sake not only of truth but also of regional peace and stability, we should pay more careful attention to what is happening, and why. We should also save our criticisms of China for issues on which Beijing has earned it.

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